Risk Taking
February 14, 2012
The June 22, 2009 cover story of Business Week which I just reread was titled “The Risk Takers.” It featured businesses which during difficult times, instead of playing it safe, placed bets on some gutsy new strategies.
To make a point, the author used an illustration that we can relate to here in Michigan. I paraphrase:
Imagine a driver on a snowy night. If the car starts to slip, the driver’s natural instinct is to slam on the brakes and jerk the steering wheel in the opposite direction. But the laws of physics advise the opposite: laying off the brakes and steering into the turn.
The author reports that from 1985 to 2000, the average merger in an economic downturn created an 8.5 percent rise in shareholder value after two years; while the average deal in good times resulted in a 6.2 percent drop in the buyer’s share value. In other words, mergers – one of the biggest, boldest moves in business – do better in bad times than good. Much better, in fact.
It wasn’t recklessness this article was celebrating; it was risk taking – daring to be aggressive, rather than just defensive, amid a weak economy. Steering into the turn, so to speak.
Just like the winter driving analogy in the article, we who are involved in school sports in Michigan can relate to the big idea of the article because we too made some of our biggest moves at our bleakest times. The MHSAA retrenched in some ways, but the greater theme as we climbed out of our bad times of 2008 was that we made unprecedented investments in new technology.
Today MHSAA.com is the website of highest traffic and MHSAA.tv is the website with the most productions of any comparable organization in the U.S. And all of these investments in technology during those bad times have allowed us to undertake the ArbiterGame project now that will provide all member high schools the electronic tools necessary to make their tough tasks of school administration more streamlined than ever before.
Full Decade Price Freeze
September 15, 2011
The 2011-12 school year marks the 10th consecutive year of no increase in MHSAA Regional tournament tickets for football and boys and girls basketball; and it’s the ninth consecutive year without increase at the District level of those tournaments. This is noteworthy on at least three levels.
First, it means parents, grandparents, neighbors and friends on fixed incomes or struggling through a fickle economy have experienced no new costs to support their local school teams over the past decade.
Second, it means that what were the MHSAA’s largest revenue sources – gate receipts from District and Regional tournaments of football, boys basketball and girls basketball – have not been used to support the MHSAA’s expanding services.
Finally, when the freeze on ticket prices is combined with the freefall of girls and boys basketball attendance since the change of girls basketball season to the winter (the four-year average total attendance is down 9.3 percent for the girls tournament and down 21.1 percent for the boys tournament), the overall effect on the MHSAA’s operational budget is dramatic.
To compensate, the MHSAA has cut expenses and created new revenue sources. For years, MHSAA tournaments produced more than 90 percent of the MHSAA’s revenue. In 2010-11, it was less than 80 percent. The 2011-12 target is less than 75 percent.